In: Economics
Blackwater Spring and Metal utilizes the same computerized spring-forming machinery in its U.S. and Malaysian plants. The first cost was $750,000 with S = $150,000 after n = 10 years. MACRS (Modified Accelerated Cost Recovery System) depreciation with n = 5 years is applied in the United States, and standard SL depreciation with n = 10 years is used by the Malaysian facility.
If the equipment is sold after 6 years for $100,000, calculate the over-and underdepreciation amounts for each method.